Correlation Between Tung Ho and Gloria Material
Can any of the company-specific risk be diversified away by investing in both Tung Ho and Gloria Material at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tung Ho and Gloria Material into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tung Ho Steel and Gloria Material Technology, you can compare the effects of market volatilities on Tung Ho and Gloria Material and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tung Ho with a short position of Gloria Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tung Ho and Gloria Material.
Diversification Opportunities for Tung Ho and Gloria Material
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tung and Gloria is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Tung Ho Steel and Gloria Material Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gloria Material Tech and Tung Ho is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tung Ho Steel are associated (or correlated) with Gloria Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gloria Material Tech has no effect on the direction of Tung Ho i.e., Tung Ho and Gloria Material go up and down completely randomly.
Pair Corralation between Tung Ho and Gloria Material
Assuming the 90 days trading horizon Tung Ho is expected to generate 1.15 times less return on investment than Gloria Material. But when comparing it to its historical volatility, Tung Ho Steel is 1.28 times less risky than Gloria Material. It trades about 0.02 of its potential returns per unit of risk. Gloria Material Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,700 in Gloria Material Technology on August 27, 2024 and sell it today you would earn a total of 190.00 from holding Gloria Material Technology or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tung Ho Steel vs. Gloria Material Technology
Performance |
| Timeline |
| Tung Ho Steel |
| Gloria Material Tech |
Tung Ho and Gloria Material Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tung Ho and Gloria Material
The main advantage of trading using opposite Tung Ho and Gloria Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tung Ho position performs unexpectedly, Gloria Material can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gloria Material will offset losses from the drop in Gloria Material's long position.| Tung Ho vs. China Steel Corp | Tung Ho vs. Feng Hsin Steel | Tung Ho vs. Ta Chen Stainless | Tung Ho vs. Chung Hung Steel |
| Gloria Material vs. China Steel Corp | Gloria Material vs. Chung Hung Steel | Gloria Material vs. Tung Ho Steel | Gloria Material vs. Feng Hsin Steel |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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